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HUF Property and Partition

What is HUF Property & Partition?

Ancestral Properties are generally known as Hindu Undivided Family Properties (HUF Properties). Such properties are inherited by a male Hindu from his forefathers. Apart from this separate/individual property (including self acquired properties) of male member of HUF thrown into common stock of the family; and properties acquired or purchased with joint efforts of family using HUF properties may also be considered as HUF properties.

A HUF originates from a common male ancestor/forefather and consists of his descendants in male line, their spouses and unmarried daughters. Every male, even when he is a member of HUF, can constitute a HUF with his own descendants and spouse. There may be smaller HUFs (as branch) in larger HUF.  Through partition, their joint status comes to an end. In terms of the Apex court judgments, to affect a partition all that is necessary is a definite and unequivocal/clear indication of intention by the members of the HUF to separate themselves from the family. Partition can be done through agreement between the members which may be written or oral and partition can also be done through courts if there is any dispute relating to the share or allocation of properties.

What are the procedures to create a HUF and define the formation of HUF?

A larger joint Hindu family i.e. HUF may have small branches through their male members who may have their own descendants (children) and spouse. Such small families within large HUF, on partition when separated from the principal HUF, form new HUF. Some time there may be situation when a single male member get separated from the HUF, he will not constitute HUF as being sole member but when he gets married, he and his wife may constitute HUF.   A HUF also comes into being when previously partitioned members can reunite for formation of bigger HUF.  Therefore, partition, marriage and reunion are three modes of formation of HUF.

Who can own HUF property and does HUF include the wives and daughters in the property transaction?

Before coming into being of Hindu Succession Act, 1956 (1956 Act), HUF properties were owned by male members of the family. Females had no right as that of males in HUF properties. 1956 Act brought major changes to Female’s rights in ancestral/HUF properties under Mitakshara School. Females (daughter, wife and mother) have been given right equal to son of the deceased male to his self-acquired properties; and share of such deceased male in the undivided HUF properties were also opened to be shared with daughter, wife/widow and mother.  Idea behind this law was to give more social protection to females.

One thing that can be noted is that a daughter, wife or mother did not have directly any right in HUF properties. Their right accrued only after the death of related male member to them. Their right to the HUF property comes not in their direct individual capacity but this only arises (as heirs of the deceased) after the death of the male member with whom they are directly related to. Therefore, due to this reason they were also unable to claim partition during the life time of their related male member of the HUF family. And if, the male member executes a Will for his share in HUF property, female’s rights to inherit would also go. While, son having independent right can claim partition of HUF property during the lifetime of his father.

After the amendment brought in 1956 Act, in 2005, Section 6 recognizes daughter as coparcener as of son in joint Hindu family governed by Mitakshara law and now she has right by birth in HUF properties.

However, a married woman does not have right in properties of her husband’s family. She can only have right in such properties as widow i.e. after death of her husband. After divorce with her husband, this right also dilutes. Now, the Government is considering to introduce amendment in law to give the wife a clearly-defined share in the husband’s “immovable residential property” in case of a split.

Does HUF arise from a contract?

It cannot be created by contract of the parties except by adoption or marriage which are generally not known as contract in Hindus. Marriage is a contract in Muslim law, but, in Hindu law it is a sacrament. Through adoption and marriage a stranger may come to HUF and become member of the Hindu family.

Mention two principle schools of Hindu law.

Principle schools of Hindu Law are Mitakshara and Dayabhaga, however, some other systems are also prevalent in India.

Dayabhaga dominates State of West Bengal, in which father has the all power of joint family property and no member of the family can enforce to divided the property or to claim his share as long as the father is alive.

Mitakshara controls the rest of part of India.  Sons get interest in the family/ancestral property by his birth.  In this school, son can claim partition in ancestral property during the life time of his father.  After amendment done in 2005 in Hindu Succession Act 1956, daughters have also been given right like son. Now, they (daughters) can also claim partition in HUF property during life time of her father.

In how many ways HUF can acquire properties?

HUF acquires property through all general modes of acquisition of property like inheritance, partition, will, purchase, gift, individual property of male member thrown into joint stock, properties earned/purchased through joint efforts of members of HUF using existing HUF properties etc except in cases properties  falling under The Hindu Gains of Learning Act, 1930. In this category properties acquired by salaried class are not included. The HUFs are reduced to non-existent properties and person living in ancestral houses in remote areas have to entertain these coparceners (living and earning outside) but person living in ancestral property have no share in their (outsider’s properties) share.

Mention some important points one should know about HUF?

  1. Generally senior male member of HUF acts as Karta(Head) of the joint family. Karta can sell the property owned in the name of HUF only in case of legal necessity for family needs and for benefit of the estate. However, it may be possible that, in future, such sale can be challenged.
  2. A female can become a karta, but only when the male members are minors or are not in a position (like mentally sick) to manage the affairs of HUF.
  3. Now daughters have same rights as of sons in HUF properties. Daughters can claim their right in ancestral agricultural properties as well as in urban properties.
  4. If oral partition has been done, its memorandum should be made. However, better would be to do partition of HUF properties through registered instrument or through court of law.
  5. Interest of all the members should be taken care of otherwise the partition done can be easily challenged in future.
  6. If there is any record keeping agency like in case of agricultural land, revenue department; one should record its name against the HUF property.
  7. Purchaser should be more vigilant while dealing such properties. They should enquire about the family tree and also with the neighbors and should also get Public Notice published in news papers.

What are the advantages and disadvantages of HUF property & partition?

Interest of members in HUF properties keep fluctuating and to some extent partition can fix this fluctuation. Therefore, legally, HUF property has not much significance. Rather most of the time it becomes very difficult to deal in rights of the interested parties. However, formation of HUF may be beneficial for tax planning.

On many occasions, the HUF property might be such which cannot be partitioned by metes and bound and courts generally ask for sale of entire property and to distribute sale proceeds in the family members. This looks rational, but, a member who does not want to sell such property and wants to live there, for reasons such as he may not have resources to buy such property or may have emotional attachment to such property, then this would amount to compelling him  to agree to such sales.

It is hereby suggested these properties should be recorded as HUF property (generally these properties were recorded in individual name of the Karta) otherwise karta will dispose of these properties without informing or safeguarding the interest of other coparceners.

Why HUF property is considered as a Pandora box?

It is not easy to know exact numbers of members who are having interest in the HUF property. The persons in possession of HUF Property; may represent that they are the only entitled ones to such property and have absolute authority to sale or deal with it, but there may be some more members not in possession and also not living nearby to such property. In such situation transaction done in such properties would be vulnerable to challenge in the court of law.

Names of female members (specially married daughters) and minors entitled in suchHUFproperty; are hardly disclosed in HUF properties sale transactions.  Therefore, there is always a possibility to challenge such transactions.

Generally, title documents of HUF property exist in name of ancestors; therefore, purchaser who is going to purchase such property rarely gets confidence about title of the property.

Mainly due to these reasons HUF property is considered as a Pandora box.

Through HUF the people avail tax benefits without showing the real source of fund. HUF has become a great source of legal avoidance of tax. This is the high time that while the sanctity of HUF should be maintained which is basic to the Indian ethos as reflected in Samriti and Dharmasharta, at the same time legal provisions should be made to make broader and more meaningful.

 

Interest under Income Tax Act

Interest under Income Tax Act

 

PARTICULARS 234A 234B 234C 234D 220(2)
NATURE OF DEFAULT DELAY OR DEFAULT IN FILING RETURN OF INCOME U/S 139(1) OR U/S 142(1) DEFAULT IN PAYMENT OF ADVANCE TAX DEFEREMENT OF ADVANCE TAX EXCESS REFUND DELAY IN PAYMENT OF AMOUNT SPECIFIED IN NOTICE OF DEMAND
APPLICABILITY Return of income of assesseeA)      is furnished after the due date of filing return orB)      is not furnished. Assessee liable to pay Advance Tax hasA)      not paid orB)      paid less than 90% of Assessed tax Assessee liable to pay Advance Tax hasA)     not paidB)     short paidany instalments within the due date of payment of such tax. Any refund is granted to the assessee u/s 143(1) –A)     No refund is due on regular assessment;B)     The amount refunded exceeds the amount of refund due on regular assessment The amount specified in notice of demand is  -not paid within the period limited u/s 220(1) – usually 30 days from the service of notice u/s 156.
AMOUNT Assessed Tax as reduced by TDS, TCS, Advance Tax and Self-Assessment tax paid before the due date of filing return u/s 139(1) and Tax relief u/s 90, 90A and 91 and MAT credit allowable u/s 115JAA. Assessed Tax as reduced by TDS, TCS, Advance Tax and Tax relief u/s 90, 90A and 91 and MAT credit allowable u/s 115JAA. Instalments of Advance Tax u/s 208 as reduced by the amount paid determined on returned income. The whole or excess amount of refund The amount specified in notice of demand.
PERIOD – COMMENCING ON the Due Date of filing return u/s 139(1) the 1st day of April of the year immediately following the ‘previous year’ In case ofCorporate assessees-3 Months for First, Second & Third Installments;1 Month for Last InstallmentIn case of Non-Corporate assessees –3 Months for First & Second Installment

1 Month for Last Installment

The Date of grant of refund The Date of payment specified in the Notice of Demand
PERIOD – ENDING ON the Date of Filing return; orwhere no return is furnished – the date of completion of assessment u/s 144. the Date of determination of total income u/s 143(1) / 143(2) /144.However, relief u/s 234B(2) is provided in respect of tax paid u/s 140A (Self Assessment Tax), in which case – the period will end on the Date of payment of tax – to the extent of amount paid.  The Date of regular assessment The Actual Date of payment.
RATE OF INTEREST simple interest @ 1.00 % per month or part thereof simple interest @ 1.00 % per month or part thereof simple interest @ 1.00 % per month or part thereof simple interest @ 0.5 % per month or part thereof simple interest @ 1.00 % per month or part thereof

 

Penalty for the Different Defaults Under Income Tax Act 1961

  1. An assesse has been made liable to penalty for the different defaults committed by him under the different provision of the Act.
Section Nature of default Minimum penalty MaximumPenalty
1 2 3 4
140A(3) Failure  to pay whole or any part of income tax and/or interest in accordance with the provision of section 140A(1) Such amount as the assessing officer may impose [sec.221(1)] Tax in arrears
221(1) Default in making payment of tax within prescribed time Such amount as the  assessing officer may impose Tax in arrears
271(1)(b) Failure to comply with a notice  under section 142(1)or 143(2)or with a direction issued  under section 142(2A) Rs.10,000 for each failure Rs.10.000 for each failure
271(1)(c)(d) Concealment of the  particulars of income or furnishing inaccurate of income or concealment of particulars of fringe benefits 100% of tax sought to be evaded 300%of tax sought to be evaded
271(A) Failure  to keep or maintain books of accounts ,documents, etc ,, as required under section 44AA Rs,25.000 Rs, 25.000
271AA Failure to keep and maintain information and documents in respect of international transaction or [with effect from July  1.2012)failure to report international transaction (with effect from April 1.2013 these provision are also applicable in the case of  specified domestic transaction] 2% of value of each international transaction
271AAA` Undisclosed income in the case of search (applicable  if search  is initiated on or  after June 1. 2007 but before July 1. 20120 10 per cent of undisclosed income of specified previous year
271AAB Undisclosed income in the case of search (applicable if search is initiated on or after July 1.2012) see para  374.2-3
271B Failure to get accounts audited under section 44AB   or furnish such report as is required under section 44AB ½%  of the total sales .turnover .or  gross receipts Rs, 1.00.000(Rs,1.50,000 with effect from april 1.2011
271BA   Failure to submit  report under section 92E Rs.1.00.000
271C Failure to  deduct the whole or  any part of tax as required under  sections 192 to 195  or failure  to pay  the whole or any part of tax as required under section 115-o(2) or second proviso to section 194B Amount of tax such per son has failed to deduct or pay
271CA Failure to collect tax at source 100% of tax which a person has failed to collect

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Annual Information Return (AIR)

WHAT IS AIR

ANNUAL INFORMATION RETURN: As per Section 285BA of the Income Tax Act, 1961, read with Rule 114E of the Income Tax Rules, 1962, specified entities (Filers) are required to furnish an Annual Information Return (AIR) in respect of specified financial transactions registered/recorded by them during the financial year (beginning on or after April 1, 2004) to the income tax authority or such other prescribed authority.

WHO IS REQUIRED TO FILE AIR:

The AIR is required to be furnished by specified persons in respect of specified transactions registered or recorded by them during a financial year;

Sr. no Class of Person Nature and Value of Transaction
1. A Banking Company A Cash deposit aggregating to Rs. 10 Lakh or more in a year in any saving account
2. Any Institution issuing Credit Card Payment made by any person against bill raised in respect of credit card issued to that person, aggregating Rs. 2 Lakh or more in the year
3. A Trustee of a Mutual Fund Receipt of Rs. 2 Lakh or more for acquiring units of that fund.
4. A Company or Institution issuing Bonds or Debenture Receipt from any person of an amount of Rs. 5 lakh or more for acquiring bonds or debentures issued.
5. A Company issuing shares through public or right issue Receipt from any person of an amount of Rs. 1 lakh or more for acquiring shares issued by the company.
6. Registrar or Sub- Registrar appointed under the Registration Act Purchase and sale by any person of immovable property valued at Rs. 30 Lakh or More
7. Any person being an officer of RBI Receipt from any person of an amounts aggregating to Rs. 5 lakh or more in a year for bond issued by Reserve Bank of India

DUE DATE FOR FURNISHING OF AIR

31st August immediately following the Financial Year in which the transaction is registered or recorded.

What are the consequences of not filing AIR?

Under section 271FA of the Income Tax Act, 1961, a penalty of Rs. 100/-per day of default may be levied on a person who is required to file Annual Information Return (AIR)

*** An entity who is required to file AIR has to file one single AIR for the whole organization.

***AIR should be furnished in Form 61A in digitized form on computer readable media.

***All filers are required to obtain TAN.

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Important Due Date In Coming Month

Income Tax
7 January 2015
Due date for deposit of Tax deducted/collected for the month of December, 2014
Due date for deposit of TDS for the Quarter ended on 31st December 2014 (where Assessing Officer has permitted quarterly deposit of TDS under sections 192, 194A, 194D or 194H.)
15 January 2015
Quarterly statement of TDS/TCS for the quarter ending December 31, 2014 (applicable in all cases of TDS/TCS except when tax is deducted by an office of the Government)
22 January 2015
Due date for issue of TDS Certificate for tax deducted under Section 194-IA in the month of December, 2014
30 January 2015
Quarterly TDS certificate (in respect of tax deducted for payments other than salary by a person not being an office of the Government) or quarterly TCS certificate (in respect of tax collected by any person) for the quarter ending December 31, 2014.
31 January 2015
Quarterly statement of tax deducted by an office of the Government for the quarter ending December 31, 2014.
Quarterly return of non-deduction at source by a banking company from interest on time deposit in respect of the quarter ending December 31, 2014.
Service Tax
06th January    Monthly/quarterly payment of Service Tax for the month/qtr ending Dec 2014
UP VAT
20th January    Monthly/quarterly VAT RETURN
29th January    Annual Return for the year ended 31st March 2014

CAG Empanelment F.Y. 15-16

OFFICE OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA
9, DEEN DAYAL UPADHYAY MARG, NEW DELHI – 110 124

CAG Empanelment F.Y. 15-16

Online Applications are invited from Chartered Accountant firms/LLPs who desire to be empanelled with the office of the Comptroller and Auditor General of India for appointment as auditors of Government Companies/Corporations for the year 2015-16. The online application will be available on our website www.saiindia.gov.in from 1st January 2015 to 15th February 2015; the firms/LLPs can apply/update the data showing the status of their firm as on 1st January 2015. After filling/updating the data, they are required to generate an online acknowledgement letter. They are also required to submit hard copies of the relevant documents in support of their online application along with a print out of the acknowledgement letter generated online. The application which does not have an online acknowledgement letter would not be entertained as a valid application.

Sd/-
Sr. Administrative Officer / CA-V

ANNUAL INFORMATION RETURN “AIR”

WHAT IS AIR

ANNUAL INFORMATION RETURN: As per Section 285BA of the Income Tax Act, 1961, read with Rule 114E of the Income Tax Rules, 1962, specified entities (Filers) are required to furnish an Annual Information Return (AIR) in respect of specified financial transactions registered/recorded by them during the financial year (beginning on or after April 1, 2004) to the income tax authority or such other prescribed authority.

WHO IS REQUIRED TO FILE AIR:

The AIR is required to be furnished by specified persons in respect of specified transactions registered or recorded by them during a financial year;

Sr. no Class of Person Nature and Value of Transaction
1. A Banking Company A Cash deposit aggregating to Rs. 10 Lakh or more in a year in any saving account
2. Any Institution issuing Credit Card Payment made by any person against bill raised in respect of credit card issued to that person, aggregating Rs. 2 Lakh or more in the year
3. A Trustee of a Mutual Fund Receipt of Rs. 2 Lakh or more for acquiring units of that fund.
4. A Company or Institution issuing Bonds or Debenture Receipt from any person of an amount of Rs. 5 lakh or more for acquiring bonds or debentures issued.
5. A Company issuing shares through public or right issue Receipt from any person of an amount of Rs. 1 lakh or more for acquiring shares issued by the company.
6. Registrar or Sub- Registrar appointed under the Registration Act Purchase and sale by any person of immovable property valued at Rs. 30 Lakh or More
7. Any person being an officer of RBI Receipt from any person of an amounts aggregating to Rs. 5 lakh or more in a year for bond issued by Reserve Bank of India

DUE DATE FOR FURNISHING OF AIR

31st August immediately following the Financial Year in which the transaction is registered or recorded.

What are the consequences of not filing AIR?

Under section 271FA of the Income Tax Act, 1961, a penalty of Rs. 100/-per day of default may be levied on a person who is required to file Annual Information Return (AIR)

*** An entity who is required to file AIR has to file one single AIR for the whole organization.

***AIR should be furnished in Form 61A in digitized form on computer readable media.

***All filers are required to obtain TAN.

THE TAXES AN E-COMMERCE STARTUP HAS TO PAY

Ecommerce Companies have increased nowadays and are rising at a tremendous pace. Because of the convenience it offers in buying things while sitting at home or office it is becoming increasingly popular. Many big and small companies are riding on bandwagon of Ecommerce.

However, law is still not very clear on the transactions done on an ecommerce website. Now let’s see the possible taxes that an ecommerce company will have to pay:

There are basically three types of taxes to be paid:

  1. Value added tax: VAT is a state levy, which is levied when the goods are sold within the state (intra state).
  2. Central sales tax: CST is levied when the sales are done from one state to another.
  3. Service tax: It is levied on the service component of the business. As such the negative list prescribed under the Service Tax regime does not exempt any specific e-commerce transaction.

The business model adopted by the Company determines how the ecommerce transactions will be taxed:

  1. Business to Consumer:

In this model the ecommerce sells the goods directly to the consumers. Such transactions will be subject to VAT or CST, depending upon whether it is an interstate sale or intrastate sale.

  1. Manufacturer/ Vendor, Ecommerce Company and Consumer:

The ecommerce collects orders from its website, issues an invoice to its buyers and give the orders to its vendors / manufacturer to deliver the products. Assuming that all the three parties are located in the same state, the Company will charge VAT and will collect the same from its Customers. The manufacturer will collect VAT from the ecommerce company which will in turn collect it from the customers. The ecommerce company can offset the VAT paid against the VAT collected by it from the customers. The Courier Company will charge service tax to the manufacturer. If the ecommerce company is taking delivery charges, it will have to charge service tax on this fee.

  1. Customer to Customer:

In customer to customer transactions, the websites does not sell anything directly but provides a platform for two customers to come together for sale and purchase transaction. The website in turn charges a commission for bringing them together. The commission charged by the website is a service fee and service tax has to be collected by the ecommerce company. In such transactions, there is no concept of Sales Tax.

PROCEDURE TO CHANGE THE REGISTERED OFFICE OF THE COMPANY

PROCEDURE TO CHANGE THE REGISTERED OFFICE OF THE COMPANY FROM ONE STATE TO ANOTHER

A company may, by special resolution, alter the provisions of its Memorandum so as to change the situation clause of its registered office from one State to another so far as may be required to enable it as provided in section 17 of the Companies Act, 1956 as given hereunder:—

(a) to carry on its business more economically or more efficiently;

(b) to attain its main purpose by new or improved means;

(c) to enlarge or change the local area of its operations;

(d) to carry on some businesses which under the existing circumstances may conveniently or advantageously be combined with the business of the company;

(e) to restrict or abandon any of the objects specified in the Memorandum;

(f) to sell or dispose of the whole, or any part of the undertaking, or of any of the undertakings of the company; or

(g) to amalgamate with any other company or body of persons.

Procedure for Change of Registered Office from one State to Another State

  • Hold a Board Meeting to consider the proposal and approve the notice of General Meeting and authorize the CS or Director to move a petition to CLB.
  • Issue the notice of General Meeting.
  • Hold General Meeting and pass the Special Resolution which is subject to the approval of CLB.
  • File form 23 within 30 days of Special Resolution.
  • Prepare a list of Creditors and Debenture holders and intimate them accordingly. The list is required to be filled with the petition and should be duly verified by an affidavit.
  • Atleast one month before filing the petition under Section 17, the company is required to publish a general notice in a newspaper one in regional language and one in English in daily newspaper circulating in the State.
  • The notice shall state that any person whose interest is likely to be affected due to change may intimate to the Bench of CLB within 21 days of the notice.
  • The notice is also required to be send to each Creditor and Debentureholder of the Company under Certificate of Posting
  • A copy of notice along with the copy of petition is also required to be sent to the Chief Secretary of the State or Union Territory concerned and the view of the concerned Government authorities will be taken in to account be the CLB.
  • File a petition in form no. 1 under Section 17 of the Companies Act, 1956. It should be duly verified by an affidavit
  • A copy of petition is also required to be sent to the ROC. In case of Section 25 Companies a copy is also required to be sent to Regional Director.

Following documents are required to be attached with the petition:-

  • Certified copy of the amended MOA and AOA.
  • Copy of the notice calling the General Meeting with explanatory statement.
  • Copy of Special Resolution.
  • Minutes of the General Meeting.
  • Affidavit verifying the petition.
  • Bank Draft\Challan evidencing payment of Fee.
  • Memorandum of appearance along with the copy of Board Resolution or duly executed Vakalatnama.
  • Copy of the latest audited balance sheet and profit and loss account of the company along with auditors’ and directors’ report.
  • Affidavit proving the dispatch and service of notice together with newspaper cutting.
  • Certified copy of List of Creditors along with the affidavit verifying the list of Creditors.
  • Acknowledgement of the receipt of petition by the ROC.

After hearing the parties the CLB shall take a final decision.

The Company shall within 3  months from receiving the order file the Certified copy of the orders to the ROC in form no. 21 alongwith the prescribed filing fees.

The Registrar shall within one month of filing the order register the same and shall issue a certificate indicating new CIN to that effect and thereafter the Company shall be required to file all the documents with the ROC in whose jurisdiction, the registered office of the company has been situated.

Make alteration in the MOA with respect to the state in every copy of Memorandum.

Notify the change of registered office in newspaper.

Each stationery, banner, signboard, bills, invoice etc. should show the new address and necessary advice should be sent to shareholders, debenture holders, and other concerned parties.

File form 18 within 30 days of change.

Notice in paper

…………………Ltd

Registered Office……….

Notice is hereby given that the Company is Changing its Registered Office, subject to the approval of shareholders and CLB, from the State of ……..to the State of ……… any person whose rights or interests are likely to be affected due to such change may intimate to the Bench within 21 days of this notice.

Date:-

Place:-                                                                                      For…………… ……….Ltd

Company Secretary

Specimen Petition under Section 17(2) of the Companies Act, 1956

FOR CHANGE IN THE REGISTERED OFFICE

FROM THE STATE OF ……TO THE STATE OF …………..

ORIGINAL PETITION NO…….OF 2014

BEFORE THE COMPANY LAW BOARD WESTERN REGION BENCH, MUMBAI

IN THE MATTER OF THE COMPANIES ACT, 1956 SECTION 17(2)

AND

IN THE MATTER OF …………..LTD

(a company registered under the Companies Act, 1956 and having its registered office at ……………….………………..)

(Petitioner)

DETAILS OF THE PETITION

Particulars of the Company

a  The petitioner Company is a company incorporated under the Companies Act, 1956.

  1. The Registered Office of the Company is presently situated at …………… …….……… ………….. In the state of ……………………
  2. Authorised Share Capital of the Company is Rs. 1,00,00,000 (Rupees One Crore) divided in to 10,00,000 shares of Rs. 10/- each. The issued, subscribed called and paid up capital of the Company is Rs. 50,00,000 (Rupees Fifty Lacs Only) divided into 5,00,000 shares of Rs. 10/- each.
  3. The Main object for which the Company was incorporated are set out in clauses 1,2 and 3 of the Clause III(A) of the MOA which is annexed hereto and marked as Annexure- 4
  4. The petitioner company states that the subject matter of the petition is within the jurisdiction of the Company Law Board, ……… Bench.

The petition is for shifting of the Registered Office of the Company from the State of ……….to the State of …….. and under Section 17 of the Companies Act, 1956.

Facts of the Case …………………….

The Company has passed Special Resolution under Section 17 of the companies Act, 1956 at the 1111111General Meeting of the Company held on …….. after due notice thereof as provided under the Companies Act, 1956 and has filed form 23 to that effect to the ROC the said resolution is reproduced herein below:

“RESOLVED THAT pursuant to the provisions of Section 17 read with section 146(2) and other applicable provisions, if any, of the Act and subject to the approval of the CLB the consent of the members of the Company be accorded to shift the registered office of the Company from the state of ………….. to the state of …………..”

“FURTHER RESOVED THAT the clause II of the Memorandum of Association of the Company be and is hereby substituted by the following

II- The Registered Office of the company is situated in the State of ………”

“FURTHER RESOLVED THAT Shri ……….. Company Secretary and Shri ……….., Director of the company be and are hereby authorised to do all such acts, deeds and things as may be necessary to give effect the above resolution.”

The petitioner declares that it has not previously filed any application, writ petition or suit regarding the matter in respect of which this petition is being made before any Court of law or any other authority or any other Bench or Board and no such application, writ petition or suit is pending before any of them.

In view of the facts mentioned in paragraph 3 (Three) above, the petitioner prays for the following relief(s):

That the alteration of the Memorandum of Association of the petitioner company, as set out in the Special Resolution passed in the General Meeting of the company passed on ……. So as to change the registered office of the company form the state of ………..to the state of ……….

Such other orders s may the Hon’ble Bench may deem fit and proper.

For ………….Ltd.

Director

Date:

Place:

Specimen of Affidavit for verifying petition

ORIGINAL PETITION NO…….OF 2014

BEFORE THE COMPANY LAW BOARD WESTERN REGION BENCH, MUMBAI

IN THE MATTER OF THE COMPANIES ACT, 1956 SECTION 17(2)

AND

IN THE MATTER OF …………..LTD

(a company registered under the Companies Act, 1956 and having its registered office at ………………..)

(Petitioner)

AFFIDAVIT VERIFYING THE PETITION 

I,…………………………………………….. S/o Shri ……………………………… aged about………..years presently residing at ……………………………………. Do hereby solemnly affirm and state as follows:

I am a director of the ………………. Ltd (petitioner company) and I am duly authorised to make the affidavit to its behalf.

The statement made in the paragraphs 1 and 2  are true to my knowledge, and the statements made in paragraphs 3,4 and 5 are based on the information received by me from the records of the company and I believe same to be true.

I do affirm that this declaration is true, that it conceals nothing and that no part of its is false. Solemnly affirmed on …th day of ………, 2014.

Date:

Place:                                                                                       For …………………..Ltd.

VARIOUS NOTICE UNDER INCOME TAX ACT

REASONS FOR NOTICE FROM INCOME TAX DEPARTMENT

Some common reasons leading to notice from Income Tax Department may include;

  1. Escaped Income:

If the taxpayer has knowingly or unknowingly left some part of income from the income tax return, he or she may get a notice from the department,

  1. Not filing returns if income is above exemption limit :

As per income tax provisions, it is mandatory to file income tax return if the income is above the exemption limit for the relevant year.

  1. Not declaring income from all sources:

Tax payer is required to pay taxes on total taxable income during the year. Therefore it is necessary to include salaries etc. from all employers and other taxable income from all relevant sources in the income tax return. For example, there may be income from interest earned on bonds, fixed deposits, recurring deposits etc. which should be included in the total income.

  1. Mismatch in TDS details as per Form 26AS and details filed in income tax return:

There may be difference between TDS details as per Form 26AS and details filed in income tax return. Both should be reconciled and differences should be rectified before filing the income tax return.

  1. Mismatch in income, expenses and investments:

Generally, investments and expenditure of the tax payer should match with his or her income. Otherwise, it may create suspicion of escaped income which may lead to notice from the department.

VARIOUS SECTIONS UNDER WHICH NOTICE CAN BE SENT

There are various sections under which Income Tax Department may send notice. These sections include;

NOTICE UNDER SECTION 131

Income Tax Department has got power under this section related to discovery of escaped income and production of evidence etc. The department under this section may ask a tax payer to submit further documents to verify income source and investment details.

NOTICE UNDER SECTION 139(9) : Defective Return

Under this section, the tax payer receives intimation of probable defect in the income tax return and he or she is given an opportunity to rectify the same within 15days from the date of such intimation or within such extended period as may be allowed. If the defect is not rectified within the aforesaid period, the return may be considered as an invalid return and accordingly the assessee may be deemed to have furnished no return.

NOTICE UNDER SECTION 142 (1)

This notice is usually served to call upon documents and details from the tax payers, and this is basically done to take a particular case under assessment.   By serving a notice u/s 142 (1) the assessing officer, in appropriate circumstances, may call upon the assessee:-

  • To furnish a return of his income or the income of any other person in respect of which he is assessable, where he has not filed his return of income within the normal time allowed or before the end of the relevant assessment year.
  • To produce or cause to be produced accounts or documents which the AO may require for the purpose of making an assessment under the Act.
  • To furnish in writing  any information on any point of matter including statement of the assessee

Compliance with this notice u/s 142(1) is mandatory even if the tax payer is of the opinion that the accounts/documents requested are irrelevant.

INTIMATION UNDER SECTION 143 (1) Summary Assessment

This is intimation cum notice for processing of income tax return filed. This intimation is usually received via email from centralized processing centre, Bangalore.  The income tax return would be processed in the following manner:

  • The total income or loss shall be computed after making adjustments with regard to any arithmetical error in the return or an incorrect claim, if such incorrect claim is apparent from any information in the return or, an incorrect claim apparent from any information in the return shall mean a claim, on the basis of an entry, in the return,
  • The tax and interest, if any, would be computed on the basis of the total income computed, and the amount of refund due to the taxpayer would be determined.
  • In case where no sum is payable or refundable and where no adjustment has been made, the acknowledgment of the return shall be deemed to be the intimation and no further intimation shall be sent.

NOTICE UNDER SECTION 143 (2) :Regular Assessment

This is a service of notice for regular assessment.. It is mandatory for carrying out scrutiny assessment. It can be served only if a return has been filed.

It has to be served within the time limit of 6 months from the end of the Financial Year in which return of income is filed.

NOTICE UNDER SECTION 147

If the AO has reason to believe that any income chargeable to tax has escaped assessments, he may assess or reassess such income, other than the income involving matters which are the subject matter of any appeal, reference or revision, which is chargeable to tax and has escaped assessment.

To initiate proceedings under 147 the AO is required to have a reason. This tangible reason should give him a belief that there is income which has expected assessment. The Supreme Court has clarified that the act nowhere states that the belief should ultimately culminate into escaped income in order to be valid reason.

To conclude – Getting notices are common these days and needs to be handled with proper care so that we don’t have any further problems.

Startups should look to engage professional expert in this field so that they do not miss out anything and the matter can be handled with utmost care as these can be a barrier for growth of startup businesses.

Notice under section 245:

Set off of refunds against tax remaining payable:

Where under any of the provisions of this Act, a refund is found to be due to any person, in lieu of payment of the refunded or any part of that amount, against the sum, if any, remaining payable under the Act by the person to whom the refund is due, after giving an intimation in writing to such person of the action proposed to be taken under this section.

NOTICE UNDER SECTION 156 :

Where any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed, the department may serve upon the assessee a notice of demand under this section, specifying the sum so payable.